National Bellas Hess, Inc. v. Department of Revenue of the State of Illinois

Opinion summary

Etalia.ai summary of the majority opinion

In the 1966 case National Bellas Hess, Inc. v. Department of Revenue of the State of Illinois, the U.S Supreme Court ruled that a state cannot require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods purchased for use within that state. The court held that such requirements would place an undue burden on interstate commerce, violating both Due Process Clause and Commerce Clause of Constitution. The decision was based on a catalog company (National Bellas Hess) which sold products nationally but had its only warehouses in Missouri and Kansas; it did not maintain any facilities or have any sales representatives in Illinois yet was asked by Illinois to collect tax from customers residing there.

Dissent summary

Etalia.ai summary of the dissenting opinions

In the dissenting opinion for National Bellas Hess, Inc. v. Department of Revenue of the State of Illinois, Justice Fortas argued that there was no constitutional barrier preventing a state from imposing a use tax on goods purchased out-of-state for use within its borders. He believed that such taxes were not an undue burden on interstate commerce and did not violate due process rights as long as they were applied fairly and uniformly to all relevant transactions. The majority's decision, he felt, created an arbitrary distinction between local businesses which had to collect sales tax and mail-order companies which did not - a situation he saw as unfair competition favoring out-of-state firms over their in-state counterparts.